Published 11:12 pm Thursday, January 22, 2009
Bad economy sinks clothing-store chain
By TED STRONG
The Goody’s store in Washington, like the rest of the chain’s 282 stores, will soon close.
The privately-owned company, which has outlets in 20 states in the South and Midwest, is seeking bankruptcy protection. It had emerged from a previous bankruptcy in October.
During that bankruptcy, company owners closed roughly 74 underperforming stores.
According to a filing with a Delaware bankruptcy court, “the Debtors emerged form the First Bankruptcy in a stronger financial position, poised to operate at a profit. … Unfortunately the significant downturn in the national economy caused severe and unexpected financial pressures.”
Those pressures peaked with an under-performing holiday sales season and the inability of the company to get “credit support from various constituencies.” The company’s owners tried to restructure debt without declaring bankruptcy, but couldn’t cut a deal, according to the filing.
The filing also revealed that the company decided to go with liquidators, who are professionals whose speciality is running stores as they go out of business and disposing of their assets. As a result, stores across the country are now plastered with signs announcing the merchant’s impending demise.
According to the Associated Press, it’s uncertain what will happen to the company’s 9,800 workers after the liquidation — being handled by a joint venture between Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC — is completed by the end of March. But without a last minute buyer or an investor to purchase high-performing stores, their job outlook is grim.
Goody’s is owned by PGDYS Lending, which is managed by Prentice Capital Management.
Wednesday afternoon, Mark Makovic and Tod Healey affixed a massive “going out of business” banner to the building that houses the Washington Goody’s. The two employees of Winterville-based Mr. Sign Guy said their company has been engaged by a liquidator to put up similar signs across eastern North Carolina. They had already placed signs at Goody’s stores in Roanoke Rapids, Greenville, Rocky Mount, Wilson and New Bern.
Attempts to speak with store employees and corporate management about Goody’s were unsuccessful.